Question: John operates a bakery and his production function per week is given in the table below. The current equilibrium weekly wage in the labor market
John operates a bakery and his production function per week is given in the table below. The current equilibrium weekly wage in the labor market is $400 per week and his fixed costs are equal to $300 per week. John sells each cake produced at his bakery for $10.
| Quantity of Labor (workers) | Quantity of cakes |
| 0 | 0 |
| 2 | 200 |
| 4 | 350 |
| 6 | 450 |
| 8 | 500 |
a. Find the marginal product of labor for each worker (2 points)
| Quantity of Labor (workers) | Marginal product of labor (cakes per worker) | VMPL |
| 0 | ||
| 2 | ||
| 4 | ||
| 6 | ||
| 8 |
Find the revenue, marginal revenue, total cost, and marginal cost for each quantity of cakes given in the table. (4 points)
| Quantity of cakes | Revenue | MR | Total Cost | Marginal Cost |
| 0 | ||||
| 200 | ||||
| 350 | ||||
| 450 | ||||
| 500 |
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